Maybe you have debts you’d like to be rid of. Maybe you’re tired of living paycheck to paycheck, or just want to know where all your money is going. Trying to meet a financial goal without first knowing where your money goes is like trying to fill a bucket with a hole in it. The solution is to pay attention to every dollar you spend. Tracking your spending is simple. The hardest part is to remember to do it. (And there are ways to help with that, too.)
Consider these three simple steps to help give you all the info you need:
Below, can show you a few ways to use all this info you’re gathering.
Once you get going, the most important thing you can do is not to stop. If you have a hard time keeping your list going, try a couple of these tips:
What’s your style? Tracking your spending may go a lot smoother if you make it fit with your normal daily routines. Do you usually use cash or credit cards? Do you keep handwritten lists? Are you on the computer all day? Here are some of the most popular tools for tracking spending:
Using paper or a spreadsheet program means you’ll need to enter and categorize everything by hand. Money-management programs and certain online programs can help with that by connecting to your online accounts and pulling in the information. They can also help categorize it.
Tracking your spending for even one week is a big accomplishment! A lot of people find they’re spending a lot more than they realized often on things they don’t really care about. Chances are, you’ll get inspired to change some of your habits so you can meet the goals that are most important to you.
So what will you use all this information for? Here are just a few ideas:
At first you might want to do a weekly review of your spending and any goals you’ve set. Once you get into a routine, you could do it monthly and still be confident that your new habit of writing everything down can help keep you on track in between reviews.
And remember — even if facing up to your spending is painful at first, before too long you’ll be glad you did.